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German
coercion
Ignacio Ramonet
THE
devastating austerity measures imposed by Berlin
across the Eurozone and on its southern members in
particular (Greece, Portugal, Spain, Italy and
Cyprus) are provoking a rise in anti-Germanic
phobia. In her recent visits to Madrid, Athens and
Lisbon, German Chancellor Angela Merkel was given a
very hostile reception. Thousands of victims of
austerity policies protested in streets and plazas
against the coercion of the “Fourth Reich” and
welcomed the German leader with Nazi flags and SS or
Wehrmacht uniforms.
In
France as well – after celebrating in due style the
50th anniversary of the Élysée Treaty or the Treaty
of Friendship between the two nations, the
cornerstone of Paris’ European policy – President
François Hollande’s friends are no longer hesitating
to demand “a democratic confrontation” with Germany,
accusing the neighboring country of “egotistic
intransigence.” Harlem Désir, general secretary of
the France Parti socialiste (PS) is encouraging its
members to place themselves at the head of the
confrontation with Angela Merkel, “the Chancellor of
austerity.” It is a fact that, to date, the idea was
that the European Union cart was being pulled by a
yoke of two states, France and Germany, in equal
measure. But this idea – silently, without any fuss
– ended when the crisis beginning 2010 violently
struck the majority of European countries, while
Germany consolidated itself as the most powerful
economy in Europe. France, which lost its Triple A
rating in 2012, fell back from the leading group and
is now seeing its German neighbor steadily
economically outstripping it.
Even
in the United Kingdom – which does not belong to the
Eurozone – the political class has risen up in
protest against the “new German hegemony” and its
consequences: a Europe dominated by Berlin or, in
other words, precisely what the European project
should have, in principle, prevented. In effect, the
EU was conceived with the idea that no state could,
nor must be, hegemonic. But Germany, after the
trauma of reunification – which it endured thanks to
the solidarity all Europeans – has become the grand
dominating power on the continent. It is the rich
nation, without crisis, which the rest
simultaneously envy and detest.
Many
analysts confirm that, paradoxically, it is
precisely the crisis that has made it possible for
Germany to “conquer Europe” and achieve a position
of dominance it has not had since 1941. As the
weekly Der Spiegel states ironically,
“Germany won World war II last week.”
The
fact is that Germany alone is leading the European
Union. Based on what it views as its successful
economy, Berlin is unhesitatingly imposing on all
members its detested national prescription:
austerity. Particularly those nations on the
Mediterranean coast, the inhabitants of which are
seen by many German politicians and the media as
“lazy, indolent, deceitful and corrupt.”
To a
certain extent, these Germans are convinced that the
crisis is bringing into opposition a North – in its
majority Protestant, hardworking, austere and
thrifty – and a South that is Catholic or Orthodox,
lazy, partying, and lavish. Merkel herself said to
members of her Party, the CDU, in May 2011, “In
countries such as Greece, Spain and Portugal, people
shouldn’t have to retire so early, in any event not
before people in Germany, and wage earners should
also have to work a bit harder, because it is not
normal for some to take long vacations when other
such as us hardly have any time off. In the long
term, is it not possible that this can work, even
with a common currency?”
Further evidence of this German conviction that
while Germans work, Mediterranean coastal dwellers
have an easy life, is the provocative statement in
Thessalonica, by German Deputy Employment Minister
Hans-Joachim Fuchtel, dispatched to Greece by Merkel
to help restructure Greek municipalities. “Studies
demonstrate that here, it takes three Greeks to do
the work of just one German.” And, on the basis of a
similar conclusion, the minister recommended the
dismissal of thousands of local officials. The
following day, these rebelled and almost killed the
German consul, Wolfgang Hoelscher-Obermaier, to
shouts of “Lynch the Nazis!”
Beyond old clichés, “lazy” as against “Nazi,” what
is in play is emerging from the crisis. Because, at
the planetary level, the other major economies, the
United States and Japan, have returned to growth,
while the EU continues submerged in recession. Hence
the questioning, more than ever, of the German “sole
solution,” based on austerity. Berlin only believes
in the reduction of budget deficits, sovereign debt
and, above all, in labor reform. This “reform” has
converted Germany into a veritable “social inferno”
for millions of employed people who are working for
less than five euros an hour in a country which does
not have a minimum wage. One out of every three jobs
is precarious. And the number of mini-jobs, paying
less than 400 euros a month, has shot up. The German
population is suffering the most with this model; in
Berlin, one out of every three children live below
the poverty threshold.
Moreover, it has been demonstrated that austerity is
not working and is destructive. With every passing
month of this remedy, Europe is sinking deeper into
recession. Successive adjustments and cuts are
killing growth and not even allowing countries to
emerge from debt. Now, it is not only the southern
countries and their populations which are protesting
against adjustment policies, they have been joined
by the Netherlands, Sweden, German social democrats
and the European Commission itself, which is of the
view that austerity has reached its limits.
Moreover, the “scientific” theses of Professors
Kenneth Rogoff and Carmen Reinhart, on which
austerity policies are based, have been revealed to
be false; they are not based on any economic
rationality.
It
is thus time to think about other solutions. Berlin
and “Merkiavellism” claim that these do not exist.
But it is easy to demonstrate the opposite. For
example, the European countries could be given much
more time – as is beginning to happen – to achieve
the famous 3% budget deficit ceiling; and also
question this absurd “golden rule.”
There would have to be a reduction in the value of
the euro, a currency which is too strong for the
majority of Eurozone countries and, which would be a
way of stimulating exports.
Japan, the second world economy, has done so under
the leadership of its new Conservative Prime
Minister, Shinzo Abe, flooding the economy with
liquidity (exactly the opposite to austerity),
reducing the value of the yen by 22% over six
months, and the growth rate has made a spectacular
leap, to place at an annual 3.5%.
Another perspective: the 120 billion euros
anticipated in the Fiscal Compact signed last year
for “stimulating growth.” What is the EU waiting for
before deciding to spend it? And the five billion
euros available in European Structural Funds? Why is
this not being utilized? With such colossal sums,
already budgeted, large infrastructural works could
be undertaken, giving work to millions of
unemployed. In other words, a real European New Deal
or, as Peer Steinbrück, Merkel’s Social Democrat
rival in the upcoming German elections on September
22, says, “We need an authentic European development
and investment plan to stimulate sustainable growth.
Because what is at stake is not the stability of the
euro, but the stability of our entire social and
political system. Social injustice is threatening
democracy.”
Another alternative to austerity would consist of
imitating what Berlin did after reunification in
1993, to the benefit of the former German Democratic
Republic, by creating a small and painless tax of
1%. At the European level, this would presuppose a
fund of 200 billion euros, which would not come
amiss to the countries in difficulties.
Another measure would be for Chancellor Merkel to
decide to raise wages in Germany, with which to
re-launch internal consumption, stimulate the German
economy (which, with a growth of barely 0.1% in the
first quarter of 2013, is close to recession),
increase imports from other European countries and
thus fuel growth throughout the Union.
And
we haven’t even touched on other solutions, such as
simply abandoning the euro and returning to the
European monetary system, as recently proposed by
Oskar Lafontaine, former German Finance Minister and
founder of Die Linke (The Left Party). As we can
see, non-austerity solutions do exist, what are
governments waiting for to adopt them? (Le Monde
Diplomatique)
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